Correlation Between Bluerock Homes and Papaya Growth

Can any of the company-specific risk be diversified away by investing in both Bluerock Homes and Papaya Growth at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bluerock Homes and Papaya Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bluerock Homes Trust and Papaya Growth Opportunity, you can compare the effects of market volatilities on Bluerock Homes and Papaya Growth and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bluerock Homes with a short position of Papaya Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluerock Homes and Papaya Growth.

Diversification Opportunities for Bluerock Homes and Papaya Growth

0.18

Correlation Coefficient

Bluerock Homes  Papaya Growth

Average diversification

The 3 months correlation between Bluerock and Papaya is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust and Papaya Growth Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papaya Growth Opportunity and Bluerock Homes is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bluerock Homes Trust are associated (or correlated) with Papaya Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papaya Growth Opportunity has no effect on the direction of Bluerock Homes i.e., Bluerock Homes and Papaya Growth go up and down completely randomly.

Pair Corralation between Bluerock Homes and Papaya Growth

If you would invest  1,119  in Papaya Growth Opportunity on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Papaya Growth Opportunity or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bluerock Homes Trust  vs.  Papaya Growth Opportunity

Bluerock Homes Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bluerock Homes Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Papaya Growth Opportunity

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Papaya Growth Opportunity are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Papaya Growth is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bluerock Homes and Papaya Growth

The main advantage of trading using opposite Bluerock Homes and Papaya Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluerock Homes position performs unexpectedly, Papaya Growth can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Papaya Growth will offset losses from the drop in Papaya Growth's long position.

The idea behind Bluerock Homes Trust and Papaya Growth Opportunity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.